The Dentist's Network #10


	Plan Your Exit Strategy Experiential Marketing

Thomas L. Snyder, DMD, MBA
Managing Partner
The Snyder Group, LLC
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Planning Your Exit Strategy: Key Questions to Address - Part II

Phase Two: Getting Close to the Finish Line

In this month’s column we’ll address those issues that will apply to those readers considering retirement. As you near retirement, your goals come closer to view. Now is the time to prepare for the final lap — the sale of your practice. Many practitioners consider using the services of a dental practice broker as opposed to orchestrating the sale of their practice by themselves. Here’s what you should know before signing on the dotted line with a dental practice broker.

How long will it take to sell my practice?
Most brokers can sell healthy practices within three to six months. In rural areas or small towns, it may take one year or more or perhaps not at all! This fact is directly related to the supply of purchasers who are willing to live in various geographic areas. Your practice location can be a major factor in timing a broker relationship. Most brokers will not sign a contract for less than a year due to preparation time for marketing and valuations. Plan accordingly.

What will it cost me to use a broker?
Commissions vary by region, however, many brokers charge a flat commission of 10% of the sale price. Some brokers use a sliding scale, which allows higher priced practices to be sold at a lower commission. In markets where there are several brokers competing for your business commissions will be lower, for example, 7% to 8% of the sale price.

What’s the difference between brokers?
All brokers have developed a database of potential purchasers who stay in contact with them regarding practices available for sale in the areas they serve. Be sure your broker has local area knowledge, and an understanding of the community demographics as well as other aspects of the region that are important to potential buyers. This knowledge can facilitate the sale. Brokers also have relationships with dental lenders. This can become important if funding a transaction is difficult. As long as underwriting requirements are met, an established, experienced broker can help get a loan approved more quickly and perhaps negotiate better interest rates and loan terms than if the purchaser tries to do it alone.

What’s the difference between exclusive and non-exclusive listings?
Some brokers will only work with their clients on an “exclusive” basis. This means that once the Listing Agreement is signed, the broker is entitled to a full commission whether they have found the purchaser or not! Therefore, before you sign an Exclusive Listing Agreement, and if you know possible candidates who may be interested in purchasing your practice, make sure they are listed on the Listing Agreement as an Exclusion. In this way, you are not obligated to pay a brokerage commission if one of these candidates purchases your practice. Some brokers will offer you a Non-Exclusive Listing Agreement, which means you are not obligated to pay a brokerage commission if you find the purchaser through your efforts or professional contacts. Brokers who use Non-Exclusive Listing Agreements usually charge a flat fee or a reduced commission for them to assist you in finalizing the transaction, when you identify the candidate.

Who decides the purchase price?
Some brokers prepare formal practice valuations using three or four methods to determine the value of your practice, and its future economic potential. Other brokers use a market approach, which identifies what the broker feels is the fair market value of your practice in your area. Since dental practices should be sold on their own merits, and not penalized by a “market value” mentality, a formal valuation is a more thorough, accurate assessment of practice worth, and future earnings in setting a sale price. Potential buyers serious about buying a profitable practice often appreciate a more thorough valuation, and will likely appreciate utilizing the information contained in the valuation when reaching a decision. While it is important to know the market trends in your area, it is also important to understand how your sale may be a better deal for a potential buyer. Knowledge is power.

As you contemplate retirement, know that your forethought and planning will only fortify the goals you set as you exit the practice of dentistry. Timing your retirement is important, and knowing when it’s time to retire is equally so. With the right information and advice, you’ll create a roadmap that will lead you toward a successful outcome.

Dr. Thomas L. Snyder, is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With over 75 years of experience in the field, The Snyder Group can provide you a full range of services relating to practice transition matters and retirement planning. They can also be reached directly at 1.800.988.5674.

If you would like additional help regarding implementing an associate into your practice, email Dr. Snyder at Drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click Here.

Joel Harris, CEO
Intelligent Dental
Marketing, Inc.
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If you think selling dentistry is hard, try selling colonoscopies!

For the last few years, I've tried to help dentists understand that in addition to standard marketing strategies and tactics such as direct mail and websites, that it is important to understand the art of experiential marketing. In a nutshell, this term refers to the process of using positive customer experiences as a powerful component or even the foundation of your marketing strategy. A while back I read the book The Experience Economy by Pine and Gilmore. They argue that business is a stage and that winning companies (or dental practices) will differentiate and profit by staging an experience that is "engaging and memorable."

To put it simply, as a dental professional who is concerned with your brand, you must be aware of experiential marketing and understand that it is the sum of every small experience each patient has in your care. A great example of how one company used experiential marketing as a marketing weapon is found at Sharp HealthCare. The executives at this hospital focused on one experience that was usually considered very bad – getting a colonoscopy. Next, they analyzed the process of getting a colonoscopy and broke it down into tiny segments. They improved in all the little things and eventually they created a colonoscopy experience so good that their clients were known to run out and tell their friends to go to Sharp "and get a colonoscopy, Here’s how they did it.

The management team at Sharp HealthCare knew that positive health care experiences meant more than the latest technology. To build the right platform for change, they set out on a national investigation to learn what the best of the best were doing to create positively memorable experience for staff and customers. Along with their “best practices” investigation, they also conducted over a hundred focus groups with staff, physicians, and patients to better understand what was working and what needed work. The response was overwhelming. Sharp was known to have the highest caliber technical skills and clinical outcomes, but each group of patients wanted more from their experience.

In 2001 Sharp brought all of their employees to the San Diego Convention center for two days to what they called a “re-commitment ceremony”. They asked their staff to re-commit to their purpose, to their work and to making a difference in the lives of their patients. They used these assemblies to re-connect their staff members with their heart – and the reason they chose healthcare as a profession in the first place.

By applying the learning from these leadership development sessions, the health care experience at Sharp is dramatically changing; from using the right words during patient interaction, to applying the fundamental steps to service interactions; fom improving and streamlining complex processes, to creating memorable, signature moments for patients and their families.

Now, when patients visit the Sharp metropolitan Outpatient Pavilion for a colonoscopy, they encounter something entirely different from the norm. Special attention is paid to personal privacy and dignity. After the procedure, juice and crackers are served on a silver tray with stemmed glassware and special mints. And after being discharged, all patients receive a phone call as well as a thank-you note signed by each caregiver – including the physicians! The experience is so different that now they have patients recruiting friends and family to have a colonoscopy. Patients are often heard to say, that having a colonoscopy at Sharp was the best healthcare experience they have ever had.

Now, as dentists I implore you to consider the power of experiential marketing. You will find that all of your other marketing efforts will be so much more effective if you are doing everything you can to provide patients with a superior health care experience. Remember, that it goes way beyond being polite and pleasant. It is so much more than a comfortable reception area and soft music in your operatories. I’m talking about radical change in the way you handle patients. Things such as personal phone calls to each patient from the dentist or rewarding patients who refer with lobster tails on dry ice delivered to their doorstep. Be amazing! Be extraordinary! And the rest of your marketing efforts will fall into place perfectly.

Joel Harris, is CEO and Co-Founder of Intelligent Dental Marketing one of the Nation's leading Dental Marketing companies focused exclusively on dental practices. Intelligent Dental Marketing provides powerful marketing tools to help dentists grow their patient base, increase their profit and improve their image. He can also be reached directly at 1.877.942.8855

Interested in speaking to Joel about your Direct Mail marketing campaign? Email him at Joel@thedentistsnetwork.net

Interested in having Joel speak to your dental society or study club? Click Here